Financing manufacturers for investing in Industry 4.0 technologies: internal financing vs. External financing

Majid Azadi, Zohreh Moghaddas, Reza Farzipoor Saen and Farookh Khadeer Hussain

International Journal of Production Research, 2024, vol. 62, issue 22, 8056-8072

Abstract: Supply chain finance (SCF) as a crucial approach plays a key role in improving commitment, trust, financial flows, and profitability in a supply chain (SC). Many industrial organisations finance their SC through two resources: internal financing (buyer) and external financing (bank). The main objective of this paper is to develop an advanced data envelopment analysis (DEA) model for measuring the sustainability of financing resources of Industry 4.0 technologies. To do so, for the first time a non-radial DEA model in the presence of both zero inputs and ratio data is proposed. In this paper, the sustainability factors, including economic, environmental, and social factors are incorporated into the proposed approach. The developed DEA model, for the first time, is applied in SCF. The results show the most sustainable financial resource for investing in Industry 4.0 technologies. Also, the inputs and outputs’ inefficiencies are determined.

Date: 2024
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DOI: 10.1080/00207543.2021.1912431

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